Nato will remain on a war footing in the skies over Libya until the last remnants of the Gaddafi regime have been defeated, European diplomats have said.

World leaders are converging on Paris on Thursday for a Friends of Libya summit intended to acclaim the National Transitional Council (NTC) as the country's new interim government, and mark a pivot point in the international community's efforts in Libya from war to reconstruction.

The leaders will discuss a new UN security council resolution which will endorse the new status quo, lifting the sanctions regime on Libya to allow the NTC to get access to over $100bn (£62bn) in state assets frozen abroad since the start of the conflict, while handing the United Nations the lead international role in rebuilding the country.

However, the NTC's western backers, led by France, Britain and the US, want to continue Nato's legal mandate to conduct military operations in Libya laid down in UN resolution 1973. The resolution, agreed in March, allows the alliance to use "all necessary measures", short of deploying ground troops, to protect civilians.

"We want to keep open the possibility of Nato operating legally as long as Gaddafi and his supporters may pose a threat, so we want to keep those elements of 1973," a European diplomat said.

Gaddafi loyalists are still holding out in Sirte on the coast, in Bani Walid – about 150 miles south of Tripoli, and in the desert city of Sebha. Gaddafi forces have rejected an ultimatum set by the NTC for troops in Sirte to surrender by tomorrow. .

The Nato mandate expires at the end of September. The North Atlantic Council, Nato's governing body, had the option of extending it when it held a regular meeting on Wednesday, but was advised by military commanders to wait until there was more clarity about what the UN planned to do.

Nato's secretary general, Anders Fogh Rasmussen, will tell the Paris summit that the alliance is ready to support UN operations, but that it will maintain its military role for the time being, conducting air strikes against pro-Gaddafi armour and artillery.

"What we have seen in the last month and a half is that every time they withdraw from a town, the Gaddafi forces shell the town, targeting not just opposing forces but the people of those towns," a Nato official said. "We cannot afford to have them withdraw from Sirte and then shell it. We will not hesitate to hit his tanks and guns, no matter what they are doing, for that reason."

European capitals were caught by surprise by the speed of the Gaddafi regime's collapse, and the fall of Tripoli on 21 August. In the days before diplomats from Britain, France and the US had been working on a UN resolution that would have endorsed a ceasefire between the rebels and the regime and deployed UN observers to monitor the truce.

"None of that is needed any more. This went much better than even the most optimistic of us expected," the European diplomat said. "There are no longer two parties to monitor, just one Libya. There is no need for a ceasefire and no need for any observers."

The US, France, Britain and Qatar, which has provided the movement with critical financial and military support, wanted a new UN resolution to have been passed before Thursday's Paris meeting. However, there was resistance from countries to writing off the Gaddafi government and giving immediate recognition to the NTC.

Russia recognised the NTC only on the eve of the summit, leaving China as the last permanent security council member yet to do so. China is attending the summit but at a low level with a vice-minister from the foreign ministry, but western capitals are hopeful that Beijing will grant recognition in the next few days.

The NTC leadership will be asked to come up with a list of requirement for international aid, which it is supposed to present to a Friends of Libya ministerial meeting in the margins of the annual UN general assembly in New York at the end of this month.